I mean this is pretty much the same thing right? California Issuing its own paper...doesnt matter much if its called an IOU or a California dollar. Its still worth the same thing. Nothing.

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Interesting, it's forbidden by Article I of the Constitution:
Section 10, Clause 1 (Contracts Clause): No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts;

Interesting, it's forbidden by Article I of the Constitution:
Section 10, Clause 1 (Contracts Clause): No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts;

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Wow. That could be interesting if somebody raises this issue. Perhaps the IOUs are unconstitutional.